Last week, I was interviewed by Dean Francesca Cornelli for her program on “conversations with leaders.” We discussed my career at Baxter and the wonderful opportunity I have had to teach at the Kellogg School of Management for the past 20 years. Here’s the link to the full interview:
Kellogg Alumni Virtual Programs
I am really enjoying writing leadership articles for Forbes Magazine several times each month. We post a link to them on LinkedIn as soon as Forbes publishes them, and I am permitted to print the full articles in my blog posts and website the following week.
Here’s the link as well as the full article regarding the impact of the Trump administration tariff policy and my opinion as to how leaders should respond:
Why Leaders Cannot Avoid Talking About Tariffs
Being a values-based leader comes with a major responsibility: telling it like it is, even when it’s not popular or politically expedient to do so. This is one of those times.
In a recent article, The New York Times described how CEOs are trying to “avoid the president’s anger” by curbing anything they say about tariffs. “For chief executives, speaking in public has become a tightrope walk. Say the wrong word and it might tick off the White House.”
Even though CEOs are choosing their words when speaking publicly, avoiding saying “tariff” is not a sustainable policy. Telling the truth—even when it’s difficult, unpopular, or politically sensitive—is the only option for values-based leaders. Otherwise, people—and especially employees and consumers—will be told one thing, while reality is another. That’s the exact opposite of values-based leadership and good corporate governance.
Let me be clear: it is the president’s prerogative to impose tariffs if he chooses—and he continues to choose to do so on both allies and adversaries. That’s a fact.
However, if the Trump Administration imposes significant tariffs on other countries, it is only logical that foreign companies will increase prices on goods and materials sold to American companies. Those companies will then be forced to increase their prices to consumers, which will obviously result in higher inflation and higher interest rates. If President Trump does not want rising inflation, as he has stated, then he and his colleagues should have taken that into consideration before imposing the tariffs.
Inflation is already showing signs of heating up. A survey from S&P Global “hinted at an acceleration in inflation in the coming months” and also indicated “a labor market slowdown” is possible. That combination raises the risk of “stagflation,” with rising prices and a stagnating economy. It’s a troubling economic picture, one that companies cannot ignore.
The Complex Game Known As Tariffs
As the Trump Administration wages trade wars with China, the European Union, and other trading partners, tariffs are being used—advance, withdraw, advance again—the way pieces are moved across a chessboard. Trade policy, however, is a complex game, with the potential for fallout on companies, consumers, investors, and the economy as a whole. It’s not just the macroeconomic environment, but also the specific impact felt by companies caught between rising costs for the materials and goods they buy overseas and the prices they need to charge on the products they sell.
Complicating matters President Trump continues to pressure CEOs in how they run their businesses and price their products. For example, just recently Apple CEO Tim Cook was threatened with a 25% tariff unless more iPhone production moves to the U.S.
Earlier, President Trump warned Walmart CEO Douglas McMillon not to raise prices because of the tariffs imposed on imported goods, saying that Walmart should “eat the tariffs.” Similarly, when Mattel said it would raise prices on toys due to tariffs—and Chief Executive Ynon Kreiz advocated for no tariffs on toys and games produced globally—Trump fired back another threat: “Let him go, and we’ll put a 100 percent tariff on his toy, and he won’t sell one toy in the United States, and that’s their biggest market.”
